Sub Saharan Africa to fall into first recession for 25 years due to COVID-19 outbreak
The Sub-Saharan Africa region will see economic growth reverse and plunge to between -2.1 percent to as low as -5.1 percentin 2020 due to the coronavirus (COVID-19) outbreak, according to the World Bank.
Gross Domestic Product in the region was at 2.4 percent in 2019.
“The COVID-19 pandemic is testing the limits of societies and economies across the world, and African countries are likely to be hit particularly hard,” said Hafez Ghanem, World Bank Vice President for Africa.
The growth downgrade is based on risks including a sharp decline in output in key trading partners, such as China and the euro area, falling commodity prices, reduced tourism, and measures taken to contain the virus, the World Bank said.
The multilateral lender estimates the virus outbreak will cost Sub-Saharan Africa between $37 billion (Ksh3.9 trillion) and $79 billion (Ksh8.4 trillion) in output losses due to disruption to trade and value chains, reduced foreign investment and aid.
The pandemic is also hitting the region’s three biggest economies; Nigeria, South Africa and Angola which had already all been struggling with weak growth and investment as well declining oil and industrial metals prices.
“We are rallying all possible resources to help countries meet people’s immediate health and survival needs while also safeguarding livelihoods and jobs in the longer term – including calling for a standstill on official bilateral debt service payments,” Ghanem said.
World Bank is deploying up to $160 billion (Ksh16.9 trillion) in financial support for developing countries over the next 15 months to help protect the poor and support businesses.
On Wednesday the African Development Bank said it will provide up to $10 billion to African governments and the private sector under a new COVID-19 Response Facility.